In the spring of 1988, I went to Paris to meet Ellen Wright, the widow of the American novelist Richard Wright, at her home in the heart of St-Germain des Prés. The purpose of the visit was to discuss James Baldwin, about whom I was writing a book and with whom Richard Wright had had a fractious, father-and-son relationship. The Wrights had moved from New York to Paris in 1947, and Baldwin, 14 years Wright's junior, arrived the following year. Whereas Wright was the author of several outstanding books, including the novel Native Son and the memoir Black Boy, the story of his gruelling Mississippi childhood, Baldwin was practically unpublished. One of the first things he turned his mind to, on settling in Paris, was an essay ostensibly about Harriet Beecher Stowe and Uncle Tom's Cabin, which ended by attacking the continuation of "protest" fiction in contemporary black literature. The prime example of the sterility cited by Baldwin was Native Son. Wright never forgave him.

The talk in Mrs Wright's living-room that afternoon turned naturally to the friendships within literary circles in Paris in the 1950s, when many other African-American writers and artists followed Wright to France, and to the climate of suspicion and resentment that gradually dissolved those alliances. The subject arose of a novel Wright had left behind when he died in 1960, set amid a fictionalised black community that congregated at the Café Tournon, in the rue Tournon, between Odéon and the Luxembourg Gardens. Island of Hallucination is mentioned in biographies - Michel Fabre offers an account of it in his excellent book The Unfinished Quest of Richard Wright (1973) - but it has never been published.

Mrs Wright spoke vivaciously about most things as we drank a bottle of what she delighted in calling "plonk". She briefly flattered me with the notion that I might write an introduction to a reissue of one of Wright's books. But when it came to Island of Hallucination she frosted over. The book would "never be published in my lifetime", she said, her eyes rising towards the ceiling as if a copy were stored in the attic above our heads. The story involved characters based on people still alive, who might view their presence in the novel as defamation. The Wright estate had fought, and lost, an expensive legal action over the use of unpublished material in a biography by Margaret Walker (Richard Wright: Daemonic Genius, 1988). Ellen Wright did not say so outright, but I left with the impression that the presence in Island of Hallucination of a character based on one member of the Café Tournon circle in particular, an African-American writer and journalist called Richard Gibson, was largely behind her decision to withhold the novel.

Island of Hallucination, begun in 1958, represented a late departure for Wright: it was the first time he had written about Paris, his home for the past 11 years. Dispatching a completed draft to his agent, Paul Reynolds, at the beginning of 1959, he sounded pessimistic about its chances: "I can readily think of a hundred reasons why Americans won't like this book. But the book is true. Everything in the book happened, but I've twisted characters so that people won't recognise them." Wright's most recent published novel, The Long Dream (1958), had had a poor reception, with critics repeating the charge that he was out of touch with the subject matter that paradoxically most inspired him, the "Negro problem". He had recently turned to non-fiction, producing books about the Far East, Spain, and the newly independent Ghana, for the title of which he coined the term "Black Power". Island of Hallucination is a sequel to The Long Dream, in which a character from the earlier novel, Fishbelly, flees to Europe to escape the racial nightmare in his homeland, as Wright had done after the war. By the time he mailed the typescript to Reynolds, he was in frail health and living apart from Ellen and their two daughters. Each book having made a poorer show than the one before, his financial affairs were in a bad way. If Island of Hallucination should "get the same press that The Long Dream did", he told Reynolds, "then I must seriously think of abandoning writing for a time. One has to be realistic."

Apart from a brief stopover on his way to Argentina to make a film of Native Son at the end of the 1940s, Wright never returned to the United States after moving to Paris. The reasons for his estrangement are not hard to illustrate. Shortly before leaving the US, the couple - Ellen Poplar was from a Polish immigrant family - had been obliged to form a bogus property company to buy the house they desired, not in Mississippi, where Wright was born in 1908, the grandson of former slaves, but in bohemian Greenwich Village. Paris would spare them such bruising indignities. In the letter to Reynolds that accompanied Island of Hallucination, in which he brooded on his hobbled career, Wright endorsed his decision to live in France, which had brought him "such a bad press in the United States". His daughters would become "emotionally ill" if he were to take them back across the ocean. "I'd be a criminal to do so."

The motives behind Wright's departure from America were not exclusively racial. At the time of his success with Native Son, he had been a member of the communist party. Although he broke with his increasingly oppressive comrades in 1942 and wrote a well-publicised account of his reasons ("I Tried to Be a Communist", included in Richard Crossman's famous anthology The God That Failed), the allegiance was neither forgotten nor forgiven at home. Almost every entry in Wright's FBI file after 1944, when the essay was first published, makes reference to his party membership, continuing into the mid-50s, by which time he was a committed anti-communist.

In Paris, on the other hand, where literary life was flourishing in the new conditions creation by the liberation, and where modern American fiction was widely read, Wright was welcomed as the representative "Negro writer". Parties arranged in his honour were attended by Albert Camus, André Gide and others. Publishers competed to obtain his books. Jean-Paul Sartre and Simone de Beauvoir befriended the Wrights, and Ellen became De Beauvoir's literary agent, a position she still held at the time of our meeting. Wright's stories were translated by the mischievous writer and musician Boris Vian, and Native Son formed the basis of a scandalous policier, I Will Spit on Your Graves, written by Vian under the guise of being a black American.

However, Wright soon began to feel he was under threat from an unexpected source: the black American writers and artists who had travelled to France in his footsteps. The first blow was struck by Baldwin's essay about Uncle Tom's Cabin and Native Son, to which he gave the title "Everybody's Protest Novel", publishing it in the first issue of a Left Bank magazine called Zero (spring 1949). Wright's pain at the assault could only have been exacerbated by the fact that the accusatory piece appeared directly after a short story by Wright himself. "The Man Who Killed a Shadow" is the tale of a black cleaner who murders a white schoolteacher and hides her body, after she attempts to seduce him and falsely accuses him of rape when he refuses her. Baldwin argued that fiction such as Wright's - including, by implication, the story that readers had just read - perpetuated a self-spinning web of "lust and fury" which, instead of unshackling the black spirit, continued to imprison it. Because of its grisly action and tangled moral outcome, Reynolds had failed to place the story in the US, but it was welcomed by the editor of Zero, Themistocles Hoetis, who relished the idea of launching his magazine with a spat between "the old black writer and the new black writer", as he put it to me during a recent interview at his home in south-east London.

Hoetis recalls receiving "The Man Who Killed a Shadow" in person at Wright's apartment on rue Monsieur le Prince, close to the Odéon, where the successful author was once photo-graphed with his family at the dinner table, while a uniformed maid waited in attendance. Wright was "a bit staid, but very friendly", Hoetis says. "I remember thinking at the time that he seemed pleased that a Yank would even come and visit him." Baldwin did not visit Wright at home, in Hoetis's recollection. "He was going to chop him down."

"Everybody's Protest Novel" was followed by even more withering attacks from Baldwin's pen. Later, Wright quarrelled with another African-American writer and one-time friend, Chester Himes, after seeing himself portrayed in what he considered to be an unkindly light in Himes's novel, A Case of Rape. A younger novelist, William Gardner Smith, author of The Last of the Conquerors and Stone Face, was alleged by Wright to be in the pay of the CIA, for whom he was supposed to be spying on what Wright called the "black church" at the Café Tournon. Wright himself was not above suspicion of a similar kind. In 1956, the American writer Kay Boyle, a veteran of Paris of the 1920s, wrote to tell him that "there is a story, a rumour, about you that is going about ... that you give information about other Americans in order to keep your passport and be able to travel". Wright must have blushed when he received this, for there were grounds for the rumours. Two years earlier, he had had difficulty in obtaining a passport from the American embassy to cross the Pyrenees to research his book Pagan Spain. After a visit to the embassy on September 16, 1954, when he provided or confirmed the names of more than one person "known to him as a member of the communist party", the passport came through. (A record of the interview is in Wright's FBI file, available under the US Freedom of Information Act.) The English poet Christopher Logue, who was in Paris in the 1950s, and was friendly with William Gardner Smith, says of the atmosphere at the Tournon: "Everybody thought everybody else was spying on someone or other for somebody."

This was the situation Wright set out to dramatise in Island of Hallucination, representing in fictional form the web of false friendship, deception, corruption and betrayal that increasingly threatened to ensnare him, or so he believed. By the time he entered the Eugène Gibez clinic, where he died of a heart attack at 52 on November 28, 1960, the project was in abeyance. Reynolds had forwarded the manuscript to Wright's editor at Doubleday, who had asked for cuts and changes that appear to have been beyond the author's energies. After his death, Ellen permitted a small section to be printed in an anthology, but then withdrew the manuscript. It now sits among the Richard Wright papers at the Beinecke Library at Yale. For many years, Wright scholars were not permitted to read it. One biographer, Addison Gayle, stated in a footnote in his book, Ordeal of a Native Son, that his request to read Island of Hallucination "was denied".

Ellen Wright died in 2004, at 92. Not long before, a photocopy of Island of Hallucination, more than 500 pages in Wright's typescript, came into my hands, by an unexpected route: it was lent to me by Richard Gibson, whose presence in the novel is thought to have been behind its suppression. Now in his 70s, Gibson, who was born in Los Angeles and raised in Philadelphia, has lived in west London for many years. He talks readily about a colourful past that involves various political affiliations and adventures, disgraces and protestations of innocence. In the early 1960s, he was head of the Fair Play for Cuba Committee in the United States, in which capacity he met Fidel Castro and Ché Guevara on several occasions. When John F Kennedy was assassinated in 1963, Gibson was approached by the CIA for information on Lee Harvey Oswald, who also had links with the FPCC. He is the author of the book African Liberation Movements, and was for a time English-language editor of the Algiers-based magazine Révolution Africaine, run by the French lawyer Jacques Vergès, who later denounced Gibson in the magazine (July-August 1964). Since his Paris days, when he was a regular at the Café Tournon, Gibson has had to fend off suggestions of egregious activity, including spying for the US government, allegations he has consistently denied, sometimes in the law courts and sometimes with a touch of humour. "If I'm CIA, where's my pension?", he once quipped to me.

Of the many things that vexed Wright in Paris in the 1950s - Baldwin's perceived treachery, Smith's snooping, Himes's unfaithfulness - it was the sequence of events that became known as the "Gibson affair" that exercised him most. In 1957, Gibson and Smith, acting in concert, sent a letter to Life magazine criticising French policy in Algeria. Such a gesture could only be seen as foolhardy on the part of an American, provoking the risk of deportation from France. Gibson wrote the letter, but signed it in the name of the newspaper cartoonist Ollie Harrington, a popular figure at the Tournon and one of the few members of the "church" whom Wright did not regard with suspicion or contempt. Wright and Harrington were furious when the letter appeared over the latter's signature in Life (October 21, 1957). Gibson was questioned by French police, and admitted his part in the forgery. He was released without charge but lost his job at Agence France Presse and returned to the US to take up a post with CBS News. Gibson claims he wrote the letter as part of a scheme concocted with Smith, involving a series of communications to various publications, each signed in a false name by a different member of the black community. (His own account of the episode will be published later this year in the journal Modern Fiction Studies.)

A version of the Gibson affair, and the related disagreement between Gibson and Harrington over the lease to a Left Bank apartment which led to a violent fight between the two men, features prominently in Island of Hallucination. There is an unpleasant character in the novel called Mechanical, who reflects certain aspects of Baldwin, notably his homosexuality, which disgusted Wright. At one point, in a nightmare, Fishbelly opens a coffin to find Mechanical dressed as a woman. Other composites display fragmentary resemblances to Smith, Harrington, Gibson himself, and figures more peripheral to the black literary scene in Paris, such as the West Indian writer CLR James, who appears to have been used as the basis for the character called Cato. When I first met Mrs Wright, James was still alive.

Island of Hallucination is not the roman à clef that admirers of Wright who know of its existence might expect, however. As with the characters, events are distorted. There are story lines that appear to be pure products of the imagination, such as the opening scene involving Fishbelly and his entrapment by French con artists who rob him of $2,000 on the flight to Paris. There are ample examples of the "lust and fury" that Baldwin objected to in Wright's fiction. And there is evidence of the numbing of his talent that Wright himself feared, in thumping dialogue among characters that are two-dimensional personifications of various vices.

The novel is at its strongest in dramatising the psychology of the black exile. On arrival in Paris, Fishbelly sits in a boulevard café and marvels at the lack of attention from surrounding whites: "'I've been toting a hundred-pound sack of potatoes on my back all my life and it's goddamned good to get rid of it,' he told himself." A woman called Irene who has tricked guilty whites out of thousands of dollars by begging money to enable her to feel "the good old sweet ground of the United States under my old black feet" is said, in a brilliant phrase, to be "bitter, but completely happy about it". Only one figure, Ned Harrison, based partly on Harrington, rises above the moral swamp, acting at times as a sane chorus on the insane action. "No man can stand absolutely alone and make any meaning out of life," Ned says at one stage, speaking for the author as much as for himself. "When you begin distrusting the images that make your world, you're standing alone. Soon you'll begin to doubt everything. Your world turns into a dream. It's as though you were having a hallucination." The action comes to a close with Mechanical hurling himself off the tower of Notre Dame cathedral, only to be caught in a net spread by the police below, in which he succeeds in hanging himself.

Wright had always been a writer with a preference for the broad brush, but his early books emerged from a conviction that he was in possession of an original subject matter: the fiery passage of the "black boy", striving to become a man in a society bent on suppressing his masculinity. In Wright's hands, the odyssey was likely to have a bloody outcome, as Baldwin perceived. In a letter to his New York publicist Bill Cole about Wright's novel The Outsider (1953), which attempts to yoke the tenets of French existentialism to the psychic state of emergency of the black male in pre-civil rights America, Baldwin said it struck him "as though Native Son had read a few books which, far from changing him, simply affords him some kind of half-assed intellectual justification for his unhappy brutality".

Gibson has had to wait for more than 40 years to read the novel in which he and others were assumed to feature so significantly that the author's widow chose the safe course of deferring publication (Gibson prefers not to say how he came into possession of a copy of the manuscript). "I turn up as Bill Hart, the 'superspy from Rome who spied on spies'," he told me. While he believes that "the motor of the book's plot comes straight from the Gibson affair", he was surprised to discover that Bill Hart is cast not as the forger of the offending letter to Life, but as the person in whose name the letter is signed. The fraud is ascribed to Mechanical, the Baldwin figure, though when the events of the Gibson affair "rocked the African-American community in Paris" in 1957, as Gibson puts it, Baldwin was on his way to the American South to report on the civil-rights movement.

In Gibson's opinion, Island of Hallucination should now be published. "It's a curiosity. It would attract attention as a document, even if not for its literary value. Anyway, Wright wanted it published." Asked if aspects of his personality in the character of Bill Hart would be likely to prompt him to seek legal redress, Gibson scoffs. "You wouldn't even know it was me. All the characters are composites." In his view, the book "is a reflection of the nightmare that Wright was living in by then".

It would not be the first posthumous publication of a book by Wright. In 1963, the estate released a lively novel set in the offices of the Chicago Post Office, Lawd Today!. Written in 1935, it makes use of the "newsreel" technique pioneered by John Dos Passos in his U.S.A. trilogy in the same decade. Near the end of his life, Baldwin, who had long since played down the old enmity, cited Lawd Today! as his favourite among Wright's novels. Ellen Wright told me he had agreed to provide an introduction to a new English edition, but he died, in 1987, before he could fulfil the promise. Plans to reissue the book subsequently collapsed.

Two years before Lawd Today!, a collection of short stories appeared, under the title Eight Men, which Wright had prepared for publication during what turned out to be his final weeks of life. It contains "The Man Who Killed a Shadow", and is dedicated to friends "whose kindness has made me feel at home in an alien land".

· James Campbell's book Paris Interzone: Richard Wright, Lolita, Boris Vian and others on the Left Bank (1994) has recently been reissued in the US, under the title Exiled in Paris.